Obamacare Insurers May Be Forced to Add Medical Providers

By Alex Wayne -
Feb 4, 2014

Insurers participating in Obamacare
may have to expand their plans to include more federally funded
health clinics, safety-net hospitals and other medical providers
used by low-income people, under a U.S. proposal.

Health plans offered through government-run insurance
exchanges may be required to cover 30 percent of “essential
community providers” in their areas in 2015, an increase from
20 percent this year, according to a letter to insurers issued
today from the Health and Human Services Department. Insurers’
provider networks will also be reviewed to ensure they provide
“reasonable access” to health care.

As millions of Americans join health plans created through
the 2010 Patient Protection and Affordable Care Act, consumers
and regulators are paying greater attention to the breadth of
available coverage. Insurers say smaller networks of hospitals
and doctors help contain costs and improve care. Providers
serving low-income people have complained that exchange plans
won’t allow them to join the networks, said Sara Rosenbaum, a
professor of health policy at George Washington University.

“Everybody is obviously very concerned that what’s going
to happen is their patients will be swept away -- they will not
be identified as preferred providers in networks,” Rosenbaum
said in a phone interview. “Clearly something has set off alarm
bells.”

About 3 million people signed up as of Jan. 24 for private
health insurance plans offered by the new marketplaces, HHS has
said. WellPoint Inc., the second-biggest U.S. insurer, said it
had added 500,000 members through the exchanges set up by the
law known as Obamacare.

Limiting Providers

More than two-thirds of health plans on exchanges have
assembled provider networks considered “narrow” or “ultra-narrow,” in which as many as 70 percent of hospitals and other
local health providers aren’t included, according to a December
study by the consulting firm McKinsey & Co.

Narrow networks enable insurers to negotiate lower prices
with hospitals and doctors, which can be passed on to consumers
in the form of lower monthly premiums. The insurance industry
argues the practice also enables them to more closely manage the
care of patients, benefiting their health.

Exchange plans with broad networks of hospitals carry
premiums 26 percent higher, on average, than similar plans from
the same carriers with narrow networks, according to the
McKinsey study.

Pushing Changes

“It is important to ensure patients can continue to
benefit from the high-value provider networks health plans have
established, which are helping to improve quality and mitigate
cost increases for consumers as the new health care reforms are
taking effect,” Robert Zirkelbach, a spokesman for America’s
Health Insurance Plans, the industry’s Washington-based lobbying
group, said in an e-mail.

Federally funded health clinics, public hospitals and other
providers that serve low-income people have been lobbying the
government for two years to require insurers to more broadly
cover their services, Dan Hawkins, vice president for federal,
state and public affairs at the National Association for
Community Health Centers, said in a phone interview.

“HHS has done a miserable job of establishing a decent
network adequacy standard to ensure that insurers are not red-lining low-income communities and communities of color and other
vulnerable populations,” he said. “For them to say we’re going
to change our rules from 20 percent to 30 percent, that’s
whistling past the graveyard. That’s nowhere near adequate.”

Aaron Albright, a spokesman for the Centers for Medicare
and Medicaid Services, which oversees the exchanges, said he
couldn’t comment on a draft proposal.

‘Strengthen’ Networks

“But, in general, CMS is working to strengthen the network
adequacy requirements that took effect for this year for the
first time under the Affordable Care Act,” Albright said in an
e-mail. “These are important provisions and include
requirements that insurers have adequate provider networks for
consumers, including access to essential community providers
that serve low-income, medically underserved individuals.”

Albright’s agency said in the letter that if it determines
a health plan’s provider network is inadequate it may exclude it
from the exchanges. The agency said it would particularly focus
on insurers’ coverage of hospitals, mental health clinics,
cancer centers and primary care physicians.

Ideally, the government would require insurers to contract
with every essential provider in their service areas, Hawkins
said. In addition to community health centers and public safety-net hospitals, essential providers include AIDS clinics, family
planning clinics, children’s hospitals and other facilities
qualifying for a federal program that provides deep discounts on
drug prices, Rosenbaum said.